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Item 1. Financial Statements

2024-05-07 compared with 2023-10-31 · 97 added, 197 removed, 468 unchanged (39% of the section changed)

52 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

THREE MONTHS ENDED

(In millions, except per share data)

4 unchanged sentences

Selling, general and administrative expenses 151.9 131.8

Operating Profit (Loss) 58.6 ( 24.9 ) 160.0 ( 58.9 )

Operating Profit 83.8 42.6

Other (income) expense

2 unchanged sentences

Other, net ( 1.0 ) ( 1.7 )

6.0 7.5 20.7 16.6

Income (Loss) Before Income Taxes 52.6 ( 32.4 ) 139.3 ( 75.5 )

Income Before Income Taxes 76.9 35.9

Income tax expense 25.1 8.7

Net Income (Loss) 36.4 (36.6) 102.4 ( 79.5 )

Net Income 51.8 27.2

Net income attributable to noncontrolling interests ( 0.2 ) ( 0.2 )

1 unchanged sentence

Accrued dividend to redeemable noncontrolling interests ( 0.2 ) ( 0.2 )

Net Income (Loss) Attributable to Stockholders $ 35.8 $ ( 37.3 ) $ 100.7 $ ( 81.7 )

Basic Earnings (Loss) per Share $ 2.08 $ ( 2.20 ) $ 5.88 $ ( 4.84 )

Diluted Earnings (Loss) per Share $ 2.06 $ ( 2.20 ) $ 5.82 $ ( 4.84 )

Net Income Attributable to Stockholders $ 51.5 $ 26.6

Basic Earnings per Share $ 2.97 $ 1.56

Diluted Earnings per Share $ 2.93 $ 1.55

Dividends per Share $ 0.3250 $ 0.3225

5 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

THREE MONTHS ENDED

(In millions)

Net Income (Loss) $ 36.4 $ ( 36.6 ) $ 102.4 $ ( 79.5 )

Net Income $ 51.8 $ 27.2

Other comprehensive income (loss)

Foreign currency translation adjustment ( 16.7 ) 11.6

Current period cash flow hedging activity ( 15.1 ) ( 26.1 ) ( 16.6 ) ( 73.8 )

Reclassification of hedging activities into earnings 6.8 12.8 22.1 20.2

Current period pension adjustment — ( 4.2 ) — ( 4.2 )

Reclassification of pension into earnings 0.8 1.1 2.2 3.5

Comprehensive Income (Loss) $ 16.9 $ ( 83.2 ) $ 103.7 $ ( 208.9 )

Current period cash flow hedging activity, net of tax ( 15.1 ) 1.4

Reclassification of hedging activities into earnings, net of tax 7.3 10.9

Reclassification of pension into earnings, net of tax 0.8 0.6

Comprehensive Income $ 28.1 $ 51.7

Net income attributable to noncontrolling interests ( 0.2 ) ( 0.2 )

Net income attributable to redeemable noncontrolling interests ( 0.3 ) ( 0.3 ) ( 0.7 ) ( 0.3 )

Net (income) loss attributable to redeemable noncontrolling interests 0.1 ( 0.2 )

Accrued dividend to redeemable noncontrolling interests ( 0.2 ) ( 0.2 )

Foreign currency translation adjustment attributable to noncontrolling interests — ( 0.2 )

Comprehensive Income (Loss) Attributable to Stockholders $ 16.4 $ ( 83.4 ) $ 102.2 $ ( 209.1 )

Comprehensive Income Attributable to Stockholders $ 27.8 $ 50.9

See notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED

THREE MONTHS ENDED

(In millions)

Operating Activities

Net income (loss) $ 102.4 $ ( 79.5 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 51.8 $ 27.2

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 11.7 11.2

3 unchanged sentences

Dividends from unconsolidated affiliates 4.4 5.7

Other non-current liabilities 5.6 ( 9.1 )

Other 4.1 2.8

Working capital changes:

Changes in assets and liabilities:

Accounts receivable ( 28.2 ) ( 12.7 )

2 unchanged sentences

Accounts payable 45.3 16.2

Other current liabilities 5.9 114.4

Other liabilities ( 30.5 ) 9.2

Net cash provided by operating activities 22.4 9.0

10 unchanged sentences

Cash dividends paid ( 5.7 ) ( 5.6 )

Cash dividends paid to noncontrolling interest ( 1.3 ) ( 0.2 )

Financing fees paid ( 0.8 ) —

Purchase of treasury stock ( 9.1 ) ( 0.1 )

2 unchanged sentences

Cash and Cash Equivalents

Increase for the period 19.2 3.1

Increase (decrease) for the period ( 16.6 ) 5.6

Balance at the beginning of the period 78.8 59.0

8 unchanged sentences

(In millions)

Balance, June 30, 2022 $ 15.9 $ 0.1 $ 0.1 $ — $ 291.2 $ 193.3 $ ( 142.6 ) $ ( 72.3 ) $ ( 70.2 ) $ 199.6 $ 7.9 $ 207.5

Stock-based compensation — — — — 1.1 — — — — 1.1 — 1.1

Stock issued under stock compensation plans — — — — ( 0.1 ) — — — — ( 0.1 ) — ( 0.1 )

Net income (loss) 0.3 — — — — ( 37.3 ) — — — ( 37.3 ) 0.1 ( 37.2 )

Cash dividends — — — — — ( 5.5 ) — — — ( 5.5 ) — ( 5.5 )

Accrued dividends 0.3 — — — — — — — — — — —

Current period other comprehensive loss — — — — — — ( 30.2 ) ( 26.1 ) ( 4.2 ) ( 60.5 ) — ( 60.5 )

Reclassification adjustment to net income — — — — — — — 12.8 1.1 13.9 — 13.9

Reclassification from permanent equity to temporary equity ( 2.8 ) — — — 2.8 — — — — 2.8 — 2.8

Foreign currency translation on noncontrolling interest — — — — — — — — — — ( 0.5 ) ( 0.5 )

Balance, September 30, 2022 $ 13.7 $ 0.1 $ 0.1 $ — $ 295.0 $ 150.5 $ ( 172.8 ) $ ( 85.6 ) $ ( 73.3 ) $ 114.0 $ 7.5 $ 121.5

Balance, June 30, 2023 $ 13.9 $ 0.1 $ 0.1 $ ( 0.1 ) $ 309.3 $ 206.5 $ ( 131.4 ) $ ( 23.9 ) $ ( 70.1 ) $ 290.5 $ 1.8 $ 292.3

Stock-based compensation — — — — 3.2 — — — — 3.2 — 3.2

Stock issued under stock compensation plans — — — 0.1 ( 0.1 ) — — — — — — —

Net income 0.3 — — — — 35.8 — — — 35.8 0.1 35.9

Cash dividends — — — — — ( 5.6 ) — — — ( 5.6 ) — ( 5.6 )

Accrued dividends 0.2 — — — — — — — — — — —

Current period other comprehensive loss — — — — — — ( 12.0 ) ( 15.1 ) — ( 27.1 ) — ( 27.1 )

Reclassification adjustment to net income — — — — — — — 6.8 0.8 7.6 — 7.6

Foreign currency translation on noncontrolling interest — — — — — — — — — — ( 0.1 ) ( 0.1 )

Balance, September 30, 2023 $ 14.4 $ 0.1 $ 0.1 $ — $ 312.4 $ 236.7 $ ( 143.4 ) $ ( 32.2 ) $ ( 69.3 ) $ 304.4 $ 1.8 $ 306.2

See notes to unaudited condensed consolidated financial statements.

HYSTER-YALE MATERIALS HANDLING, INC.

AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY AND PERMANENT EQUITY

Temporary Equity Permanent Equity

Accumulated Other Comprehensive Income (Loss)

Redeemable Noncontrolling Interest Class A Common Stock Class B Common Stock Treasury Stock Capital in Excess of Par Value Retained Earnings Foreign Currency Translation Adjustment Deferred Gain (Loss) on Cash Flow Hedging Pension Adjustment Total Stockholders' Equity Noncontrolling Interests Total Permanent Equity

(In millions)

Balance, December 31, 2022 $ 14.2 $ 0.1 $ 0.1 $ — $ 297.7 $ 152.7 $ ( 137.0 ) $ ( 37.7 ) $ ( 71.5 ) $ 204.4 $ 6.5 $ 210.9

1 unchanged sentence

Stock issued under stock compensation plans — — — ( 0.1 ) — — — — — ( 0.1 ) — ( 0.1 )

Net income (loss) 0.3 — — — — ( 81.7 ) — — — ( 81.7 ) 1.6 ( 80.1 )

Net income 0.2 — — — — 26.6 — — — 26.6 0.2 26.8

Cash dividends — — — — — ( 5.6 ) — — — ( 5.6 ) — ( 5.6 )

3 unchanged sentences

Purchase of noncontrolling interest — — — — 0.8 — — — — 0.8 ( 4.0 ) ( 3.2 )

Reclassification from permanent equity to temporary equity 13.1 — — — ( 6.5 ) — — — — ( 6.5 ) ( 6.6 ) ( 13.1 )

Sale of noncontrolling interest — — — — — — — — — — ( 0.7 ) ( 0.7 )

Foreign currency translation on noncontrolling interest 0.1 — — — — — — — — — 0.1 0.1

Balance, September 30, 2022 $ 13.7 $ 0.1 $ 0.1 $ — $ 295.0 $ 150.5 $ ( 172.8 ) $ ( 85.6 ) $ ( 73.3 ) $ 114.0 $ 7.5 $ 121.5

Balance, March 31, 2023 $ 14.7 $ 0.1 $ 0.1 $ ( 0.1 ) $ 303.4 $ 173.7 $ ( 125.4 ) $ ( 25.4 ) $ ( 70.9 ) $ 255.5 $ 2.1 $ 257.6

Balance, December 31, 2023 $ 14.8 $ 0.1 $ 0.1 $ — $ 327.7 $ 256.3 $ ( 118.3 ) $ ( 9.0 ) $ ( 67.0 ) $ 389.9 $ 2.1 $ 392.0

2 unchanged sentences

Purchase of treasury stock — — — ( 9.1 ) 9.1 — — — — — — —

Net income 0.7 — — — — 100.7 — — — 100.7 0.3 101.0

Net income (loss) ( 0.1 ) — — — — 51.5 — — — 51.5 0.2 51.7

Cash dividends — — — — — ( 5.7 ) — — — ( 5.7 ) — ( 5.7 )

2 unchanged sentences

Reclassification adjustment to net income — — — — — — — 7.3 0.8 8.1 — 8.1

Purchase of noncontrolling interest — — — — 0.8 — — — — 0.8 ( 4.0 ) ( 3.2 )

Sale of noncontrolling interest — — — — — — — — — — ( 0.7 ) ( 0.7 )

Foreign currency translation on noncontrolling interest ( 0.3 ) — — — — — — — — — 0.1 0.1

Balance, September 30, 2023 $ 14.4 $ 0.1 $ 0.1 $ — $ 312.4 $ 236.7 $ ( 143.4 ) $ ( 32.2 ) $ ( 69.3 ) $ 304.4 $ 1.8 $ 306.2

Balance, March 31, 2024 $ 14.9 $ 0.1 $ 0.1 $ ( 9.1 ) $ 336.9 $ 302.1 $ ( 135.0 ) $ ( 16.8 ) $ ( 66.2 ) $ 412.1 $ 2.3 $ 414.4

See notes to unaudited condensed consolidated financial statements.

8 unchanged sentences

("HYG"), designs, engineers, manufactures, sells and services a comprehensive line of lift trucks, attachments and aftermarket parts marketed globally primarily under the Hyster ® and Yale ® brand names, mainly to independent Hyster ® and Yale ® retail dealerships.

Lift trucks and component parts are manufactured in the United States, China, Northern Ireland, Mexico, the Netherlands, Brazil, the Philippines, Italy, Japan and Vietnam.

Lift trucks and component parts are manufactured in the United States, Northern Ireland, China, Mexico, the Netherlands, Brazil, the Philippines, Italy, Japan and Vietnam.

As of March 31, 2024, the Company owned a 90% majority interest in Hyster-Yale Maximal Forklift (Zhejiang) Co., Ltd.

("Hyster-Yale Maximal").

The Company operates Bolzoni S.p.A.

20 unchanged sentences

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company as of September 30, 2023 and the results of its operations and changes in equity for the three and nine months ended September 30, 2023 and 2022, and the results of its cash flows for the nine months ended September 30, 2023 and 2022 have been included.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position of the Company as of March 31, 2024 and the results of its operations and changes in equity for the three months ended March 31, 2024 and 2023, and the results of its cash flows for the three months ended March 31, 2024 and 2023 have been included.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

1 unchanged sentence

Note 2— Recently Issued Accounting Standards

In 2023, the Company did not adopt any recent accounting standard updates ("ASU") which had a material effect on the Company's financial position, results of operations, cash flows or related disclosures.

Adopted Accounting Pronouncements

In the first quarter of 2024, the Company did not adopt any recent accounting standard updates ("ASU") which had a material effect on the Company's financial position, results of operations, cash flows or related disclosures.

Recent Accounting Pronouncements

The following table provides a brief description of ASUs not yet adopted:

4 unchanged sentences

January 1, 2025 The Company is currently evaluating the guidance and the effect on its financial position, results of operations, cash flows and related disclosures.

ASU 2023-07, Segment Reporting (Topic 280) The guidance provides requirements for new and updated segment disclosures.

December 31, 2024 The Company is currently evaluating the guidance and the effect on its related disclosures.

ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) The guidance provides requirements for new and updated income tax disclosures.

January 1, 2025 The Company is currently evaluating the guidance and the effect on its related disclosures.

Note 3— Revenue

18 unchanged sentences

Standalone selling prices are generally determined based on the prices charged to customers or using expected cost plus margin.

Impairment losses recognized on receivables or contract assets were not significant for the nine months ended September 30, 2023 and 2022.

Impairment losses recognized on receivables or contract assets were not significant for the three months ended March 31, 2024 and 2023.

The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less.

4 unchanged sentences

THREE MONTHS ENDED

SEPTEMBER 30, 2023

MARCH 31, 2024

Lift truck business

6 unchanged sentences

THREE MONTHS ENDED

SEPTEMBER 30, 2022

Lift truck business

Americas EMEA JAPIC Bolzoni Nuvera Elims Total

Dealer sales $ 288.7 $ 128.6 $ 57.1 $ — $ — $ — $ 474.4

Direct customer sales 104.0 1.8 — — — — 105.8

Aftermarket sales 154.2 25.3 8.2 — — — 187.7

Other 24.4 3.7 0.2 82.2 1.2 ( 39.5 ) 72.2

Total Revenues $ 571.3 $ 159.4 $ 65.5 $ 82.2 $ 1.2 $ ( 39.5 ) $ 840.1

NINE MONTHS ENDED

SEPTEMBER 30, 2023

Lift truck business

Americas EMEA JAPIC Bolzoni Nuvera Elims Total

Dealer sales $ 1,190.1 $ 492.4 $ 126.6 $ — $ — $ — $ 1,809.1

Direct customer sales 403.9 7.4 — — — — 411.3

Aftermarket sales 536.4 83.1 22.0 — — — 641.5

Other 60.5 16.5 0.5 288.0 4.1 ( 140.4 ) 229.2

Total Revenues $ 2,190.9 $ 599.4 $ 149.1 $ 288.0 $ 4.1 $ ( 140.4 ) $ 3,091.1

NINE MONTHS ENDED

SEPTEMBER 30, 2022

MARCH 31, 2023

Lift truck business

16 unchanged sentences

In the United States, Bolzoni also has revenue for sales of lift truck components to the lift truck business.

Nuvera's revenues include

the sale of fuel cell stacks and engines to third parties and to the lift truck business.

Nuvera's revenues include development funding from third-party agreements and the sale of fuel cell stacks and engines to third parties and the lift truck business.

In all revenue transactions, the Company receives cash equal to the invoice price.

9 unchanged sentences

Foreign currency effect ( 0.2 )

Balance, September 30, 2023 $ 110.8

Balance, March 31, 2024 $ 80.7

Note 4— Business Segments

12 unchanged sentences

Financial information for each reportable segment is presented in the following table:

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

THREE MONTHS ENDED

Revenues from external customers

7 unchanged sentences

Total $ 1,056.5 $ 999.3

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

Operating profit (loss)

Americas $ 89.6 $ 47.5

EMEA 2.4 ( 13.2 ) 6.1 ( 35.4 )

JAPIC ( 5.5 ) ( 2.3 )

12 unchanged sentences

federal statutory rate to the reported income tax rate is as follows:

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

Income (loss) before income taxes $ 52.6 $ ( 32.4 ) $ 139.3 $ ( 75.5 )

THREE MONTHS ENDED

Income before income taxes $ 76.9 $ 35.9

Statutory taxes (21%) $ 16.1 $ 7.5

6 unchanged sentences

Reported income tax rate 32.6 % 24.2 %

The Company's estimated annual effective income tax rate assumes that a significant portion of its net operating loss carryforwards will be utilized in 2023 along with the release of the associated valuation allowances.

This release will be more than offset by the capitalization of research and development expenses under current U.S.

tax rules for which a valuation allowance will be provided.

In 2024, the Company’s reported income tax rate for the current year differs from the U.S.

federal statutory rate primarily as a result of recording an additional valuation allowance attributable to the capitalization of research and development expenses under current U.S.

In 2023, the Company's reported income tax rate assumed that a significant portion of its net operating loss carryforwards would be utilized in 2023 along with the release of the associated valuation allowances.

This release was offset by the capitalization of research and development expenses under U.S.

tax rules for which a valuation allowance was provided.

The net of these items is included in the valuation allowance line in the table above.

During the first nine months of 2023, the Company recorded other permanent adjustments primarily related to the unfavorable tax effects of non-U.S.

rate differences, state income taxes, non-deductible compensation and global intangible low-taxed income, partially offset by favorable tax effects of foreign derived intangible income, federal income tax credits and equity interest earnings.

During the third quarter of 2023, the Company recognized a discrete tax benefit of $ 1.2 million primarily related to the expiration of the statute of limitations for uncertain tax positions.

During the second quarter of 2023 and 2022, the Company recognized discrete tax benefits of $ 2.3 million and $ 4.5 million, respectively, mainly resulting from the expiration of the statute of limitations for uncertain tax positions related to acquisitions.

Of those amounts, an offsetting pre-tax indemnity receivable was recorded for $ 2.1 million and $ 3.8 million in the second

quarter of 2023 and 2022, respectively.

The expense for the release of the indemnity receivable was recorded in pre-tax earnings on the line “Other, net” in the unaudited condensed consolidated statements of operations.

Note 6— Reclassifications from OCI

1 unchanged sentence

OCI Components Amount Reclassified from OCI Affected Line Item

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

THREE MONTHS ENDED

Gain (loss) on cash flow hedges:

1 unchanged sentence

Foreign exchange contracts ( 9.2 ) ( 9.7 ) Cost of sales

Total before tax ( 6.9 ) ( 12.8 ) ( 22.2 ) ( 20.0 ) Income (loss) before income taxes

Tax (expense) benefit 0.1 — 0.1 ( 0.2 ) Income tax expense (benefit)

Net of tax $ ( 6.8 ) $ ( 12.8 ) $ ( 22.1 ) $ ( 20.2 ) Net income (loss)

Total before tax ( 7.3 ) ( 10.9 ) Income before income taxes

Tax (expense) benefit — — Income tax expense

Net of tax $ ( 7.3 ) $ ( 10.9 ) Net income

Amortization of defined benefit pension items:

Actuarial loss $ ( 0.8 ) $ ( 0.7 ) Other, net

Total before tax ( 0.8 ) ( 1.1 ) ( 2.2 ) ( 3.5 ) Income (loss) before income taxes

Tax (expense) benefit — — — — Income tax expense (benefit)

Net of tax $ ( 0.8 ) $ ( 1.1 ) $ ( 2.2 ) $ ( 3.5 ) Net income (loss)

Total before tax ( 0.8 ) ( 0.7 ) Income before income taxes

Tax (expense) benefit — 0.1 Income tax expense

Net of tax $ ( 0.8 ) $ ( 0.6 ) Net income

Total reclassifications for the period $ ( 8.1 ) $ ( 11.5 )

4 unchanged sentences

This valuation methodology is Level 2 as defined in the fair value hierarchy.

At September 30, 2023, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 476.1 million and $ 484.9 million, respectively.

At December 31, 2022, the fair value and carrying value of revolving credit agreements and long-term debt, excluding finance leases, was $ 486.4 million and $ 490.3 million, respectively.

At March 31, 2024, the carrying value and fair value of

revolving credit agreements and long-term debt, excluding finance leases, was $ 448.1 million and $ 447.3 million, respectively.

At December 31, 2023, the carrying value and fair value of revolving credit agreements and long-term debt, excluding finance leases, was $ 466.7 million and $ 464.0 million, respectively.

Derivative Financial Instruments

7 unchanged sentences

Gains and losses on these derivatives are generally recognized in cost of sales.

The Company periodically enters into forward foreign currency contracts that are designated as net investment hedges of the Company's net investment in its foreign subsidiaries.

For derivative instruments that are designated and qualified as a hedge of a net investment in foreign currency, the gain or loss is reported in OCI as part of the cumulative translation adjustment to the extent it is effective.

The Company utilizes the forward-rate method of assessing hedge effectiveness.

The Company uses interest rate swap agreements to partially reduce risks related to floating rate financing agreements that are subject to changes in the market rate of interest.

9 unchanged sentences

Foreign Currency Derivatives:

The Company held forward foreign currency exchange contracts with total notional amounts of $ 1.0 billion at September 30, 2023, primarily denominated in euros, Japanese yen, U.S.

dollars, Chinese renminbi, British pounds, Swedish kroner, Mexican pesos, and Australian dollars.

The Company held forward foreign currency exchange contracts with total notional amounts of $ 0.6 billion at March 31, 2024, primarily denominated in euros, Japanese yen, Chinese renminbi, U.S.

dollars, British pounds, Swedish kroner, Mexican pesos, and Australian dollars.

The Company held forward foreign currency exchange contracts with total notional amounts of $ 0.9 billion at December 31, 2023, primarily denominated in euros, Japanese yen, U.S.

dollars, Chinese renminbi, British pounds, Mexican pesos, Swedish kroner and Australian dollars.

The fair value of these contracts approximated a net liability of $ 45.7 million and $ 43.5 million at September 30, 2023 and December 31, 2022, respectively.

dollars, Chinese renminbi, British pounds, Swedish kroner, Mexican pesos and Australian dollars.

The fair value of these contracts approximated a net liability of $ 24.0 million and $ 12.2 million at March 31, 2024 and December 31, 2023, respectively.

Forward foreign currency exchange contracts that qualify for hedge accounting are generally used to hedge transactions expected to occur within the next 36 months.

The mark-to-market effect of forward foreign currency exchange contracts that are considered effective as hedges has been included in OCI.

Based on market valuations at September 30, 2023, $ 37.9 million of the amount of net deferred loss included in OCI at September 30, 2023 is expected to be reclassified as expense into the unaudited condensed consolidated statements of operations over the next twelve months, as the transactions occur.

Based on market valuations at March 31, 2024, $ 26.1 million of the amount of net deferred loss included in OCI at March 31, 2024 is expected to be reclassified as expense into the unaudited condensed consolidated statements of operations over the next twelve months, as the transactions occur.

Interest Rate Derivatives:

1 unchanged sentence

In addition, the Company holds certain contracts that hedge interest payments on Bolzoni's debt.

The following table summarizes the notional amounts, related rates, excluding spreads, and remaining terms of interest rate swap agreements at September 30, 2023 and December 31, 2022:

The following table summarizes the notional amounts, related rates, excluding spreads, and remaining terms of interest rate swap agreements at March 31, 2024 and December 31, 2023:

Notional Amount Average Fixed Rate

SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30 DECEMBER 31

2023 2022 2023 2022 Term at September 30, 2023

MARCH 31 DECEMBER 31 MARCH 31 DECEMBER 31

2024 2023 2024 2023 Term at March 31, 2024

$ 180.0 $ 180.0 1.65 % 1.65 % Extending to May 2027

$ 6.2 $ 7.5 0.56 % 0.51 % Extending to May 2027

The fair value of all interest rate swap agreements was a net asset of $ 17.4 million and $ 16.1 million at September 30, 2023 and December 31, 2022, respectively.

The fair value of all interest rate swap agreements was a net asset of $ 13.6 million and $ 11.9 million at March 31, 2024 and December 31, 2023, respectively.

The mark-to-market effect of interest rate swap agreements that are considered effective as hedges has been included in OCI.

Based on market valuations at September 30, 2023, $ 7.1 million of the amount included in OCI as net deferred gain is expected to be reclassified as income in the unaudited condensed consolidated statements of operations over the next twelve months, as cash flow payments are made in accordance with the interest rate swap agreements.

Based on market valuations at March 31, 2024, $ 6.5 million of the amount included in OCI as net deferred gain is expected to be reclassified as income in the unaudited condensed consolidated statements of operations over the next twelve months, as cash flow payments are made in accordance with the interest rate swap agreements.

The following table summarizes the fair value of derivative instruments reflected on a gross basis by contract as recorded in the unaudited condensed consolidated balance sheets:

Asset Derivatives Liability Derivatives

Balance Sheet Location SEPTEMBER 30

Balance Sheet Location MARCH 31

2024 DECEMBER 31

2022 Balance Sheet Location SEPTEMBER 30

2023 Balance Sheet Location MARCH 31

2024 DECEMBER 31

5 unchanged sentences

Foreign currency exchange contracts

Current Other current liabilities 5.0 2.6 Other current liabilities 41.6 32.1

Current Prepaid expenses and other 2.1 1.2 Prepaid expenses and other 0.9 1.4

Other current liabilities 3.7 7.2 Other current liabilities 26.2 22.2

Long-term Other non-current assets — 2.7 Other non-current assets — 0.5

9 unchanged sentences

The following table summarizes the offsetting of the fair value of derivative instruments on a gross basis by counterparty as recorded in the unaudited condensed consolidated balance sheets:

Derivative Assets as of September 30, 2023 Derivative Liabilities as of September 30, 2023

Derivative Assets as of March 31, 2024 Derivative Liabilities as of March 31, 2024

Gross Amounts of Recognized Assets Gross Amounts Offset Net Amounts Presented Net Amount Gross Amounts of Recognized Liabilities Gross Amounts Offset Net Amounts Presented Net Amount

11 unchanged sentences

Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from OCI into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from OCI into Income (Effective Portion)

THREE MONTHS ENDED NINE MONTHS ENDED THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

THREE MONTHS ENDED THREE MONTHS ENDED

MARCH 31 MARCH 31

Derivatives Designated as Hedging Instruments 2024 2023 2024 2023

15 unchanged sentences

All other eligible employees of the Company, including employees whose pension benefits are frozen, receive retirement benefits under defined contribution retirement plans.

During the third quarter of 2022, the Company recognized a settlement loss of $ 1.5 million resulting from lump-sum distributions exceeding the total projected interest cost for the plan year for its U.S.

pension plan.

The Company remeasured the plan as of September 30, 2022 using a discount rate of 5.52 % compared to the December 31, 2021 discount rate of 2.58 %.

As a result of the remeasurement, the funded status of the plan decreased by $ 4.3 million and accumulated other comprehensive income increased by $ 4.2 million ($ 4.2 million net of tax).

The Company presents the components of net benefit cost, other than service cost, in other (income) expense in the unaudited condensed consolidated statements of operations for its pension plans.

The Company presents the components of net periodic pension expense (benefit), other than service cost, in other (income) expense in the unaudited condensed consolidated statements of operations for its pension plans.

Service cost for the Company's pension plan is reported in operating profit.

The components of pension (income) expense are set forth below:

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

THREE MONTHS ENDED

Interest cost $ 0.5 $ 0.6

Expected return on plan assets ( 0.6 ) ( 0.6 )

Settlement loss — 1.5 — 1.5

Amortization of actuarial loss 0.5 0.5

Total $ 0.5 $ 1.5 $ 1.5 $ 1.4

Service cost $ — $ 0.1 $ — $ 0.2

Net periodic pension expense $ 0.4 $ 0.5

Interest cost $ 1.3 $ 1.3

1 unchanged sentence

Amortization of actuarial loss 0.3 0.2

Total $ ( 0.3 ) $ ( 0.3 ) $ ( 0.9 ) $ ( 1.0 )

Net periodic pension benefit $ ( 0.1 ) $ ( 0.3 )

Note 9— Inventories

8 unchanged sentences

Inventories are stated at the lower of cost or market for last-in, first-out (“LIFO”) inventory or lower of cost or net realizable value for first-in, first-out (“FIFO”) inventory.

At September 30, 2023 and December 31, 2022, 50 % and 52 %, respectively, of total inventories were determined using the LIFO method, which consists primarily of manufactured inventories, including service parts, for the lift truck business in the United States.

At March 31, 2024 and December 31, 2023, 52 % and 49 %, respectively, of total inventories were determined using the LIFO method, which consists primarily of manufactured inventories, including service parts, for the lift truck business in the United States.

The FIFO method is used with respect to all other inventories.

2 unchanged sentences

Because these estimates are subject to change and may be different than the actual inventory levels and costs at the end of the year, interim results are subject to the final year-end LIFO inventory valuation.

Note 10—Current and Long-Term Financing

On May 25, 2023, the Company entered into an amendment of its secured, floating-rate revolving credit facility (the "Facility").

As a result of the amendment, among other items, (i) a new tranche of revolving loans with aggregate commitments of $ 25.0 million (the "FILO Commitments") was established under the Facility and (ii) the benchmark interest rate for U.S.

dollar-denominated borrowings under the Facility changed from LIBOR to Term SOFR, each as defined in the Facility.

The FILO Commitments will terminate on May 1, 2024 unless otherwise terminated prior to such date by the Company in accordance with the terms of the Facility.

Commencing December 1, 2023, the FILO Commitments will amortize on a monthly basis in the amount of $4.2 million per month.

Loans under the FILO Commitments ("FILO Loans") bear interest at a floating rate, which can be a base rate or Term SOFR, plus an applicable margin.

The applicable margins for FILO Loans are 2.25 % for base rate loans and 3.25 % for Term SOFR loans.

Subsequent to the amendment, existing U.S.

Loans (as defined in the Facility) were reallocated to the FILO Commitment.

As a result of such reallocation, the FILO Commitment was fully utilized as of the closing.

After giving effect to the amendment, the Facility consists of a domestic revolving credit facility in the amount of $ 210.0 million, a foreign revolving credit facility in the amount of $ 90.0 million and the FILO Commitments in the amount of $ 25.0 million.

The Company incurred approximately $ 0.8 million of additional deferred financing fees in connection with the amendment of the Facility.

Note 10— Product Warranties

15 unchanged sentences

Payments made ( 8.8 )

Balance at September 30, 2023 $ 66.4

Foreign currency effect ( 0.5 )

Balance at March 31, 2024 $ 73.2

Note 11— Contingencies

7 unchanged sentences

Terms of the third-party financing arrangements for which the Company is providing recourse or repurchase obligations generally range from one to five years .

Total amounts subject to recourse or repurchase obligations at September 30, 2023 and December 31, 2022 were $ 138.7 million and $ 133.2 million, respectively.

As of September 30, 2023, losses anticipated under the terms of the recourse or repurchase obligations were not significant and reserves have been provided for such losses based on historical experience in the accompanying unaudited condensed consolidated financial statements.

The Company generally retains a security interest in

the related assets financed such that, in the event the Company would become obligated under the terms of the recourse or repurchase obligations, the Company would take title to the assets financed.

The fair value of collateral held at September 30, 2023 was approximately $ 192.4 million based on Company estimates.

Total amounts subject to recourse or repurchase obligations at March 31, 2024 and December 31, 2023 were $ 161.6 million and $ 162.4 million, respectively.

As of March 31, 2024, losses anticipated under the terms of the recourse or repurchase obligations were not significant and reserves have been provided for such losses based on historical experience in the accompanying unaudited condensed consolidated financial statements.

The Company generally retains a security interest in the related assets financed such that, in the event the Company would become obligated under the terms of the recourse or repurchase obligations, the Company would take title to the assets financed.

The fair value of collateral held at March 31, 2024 was approximately $ 218.4 million based on Company estimates.

The Company estimates the fair value of the collateral using information regarding the original sales price, the current age of the equipment and general market conditions that influence the value of both new and used lift trucks.

The Company also regularly monitors the external credit ratings of the entities for which it has provided recourse or repurchase obligations.

As of September 30, 2023, the Company did not believe there was a significant risk of non-payment or non-performance of the obligations by these entities;

As of March 31, 2024, the Company did not believe there was a significant risk of non-payment or non-performance of the obligations by these entities;

however, there can be no assurance that the risk may not increase in the future.

In addition, the Company has an agreement with WF to limit its exposure to losses at certain eligible dealers.

Under this agreement, losses related to $ 28.2 million of recourse or repurchase obligations for these certain eligible dealers are limited to 7.5 % of their original loan balance, or $ 13.4 million as of September 30, 2023.

The $ 28.2 million is included in the $ 138.7 million of total amounts subject to recourse or repurchase obligations at September 30, 2023.

Under this agreement, losses related to $ 33.2 million of recourse or repurchase obligations for these certain eligible dealers are limited to 7.5 % of their original loan balance, or $ 14.0 million as of March 31, 2024.

The $ 33.2 million is included in the $ 161.6 million of total amounts subject to recourse or repurchase obligations at March 31, 2024.

Generally, the Company sells lift trucks through its independent dealer network or directly to customers.

2 unchanged sentences

On occasion, the credit quality of a customer or credit concentration issues within WF may require the Company to provide recourse or repurchase obligations of the lift trucks purchased by customers and financed through HYGFS.

At September 30, 2023, approximately $ 125.7 million of the Company's total recourse or repurchase obligations of $ 138.7 million related to transactions with HYGFS.

At March 31, 2024, approximately $ 152.5 million of the Company's total recourse or repurchase obligations of $ 161.6 million related to transactions with HYGFS.

In connection with the joint venture agreement, the Company also provides a guarantee to WF for 20 % of HYGFS’ debt with WF, such that the Company would become liable under the terms of HYGFS’ debt agreements with WF in the case of default by HYGFS.

At September 30, 2023, loans from WF to HYGFS totaled $ 1.2 billion.

At March 31, 2024, loans from WF to HYGFS totaled $ 1.3 billion.

Although the Company’s contractual guarantee was $ 268.5 million, the loans by WF to HYGFS are secured by HYGFS’ customer receivables, of which the Company guarantees $ 152.5 million.

13 unchanged sentences

The Company's equity investments in unconsolidated affiliates recorded on the unaudited condensed consolidated balance sheets are as follows:

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

HYGFS $ 20.7 $ 22.2

1 unchanged sentence

Dividends received from unconsolidated affiliates are summarized below:

NINE MONTHS ENDED

THREE MONTHS ENDED

HYGFS $ 4.4 $ 5.7

$ 10.5 $ 15.6

Summarized financial information for HYGFS and SN is as follows:

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

THREE MONTHS ENDED

Revenues $ 108.1 $ 108.0

2 unchanged sentences

Net income $ 10.4 $ 11.7

The Company has a non-U.S.

equity investment in a third party valued using a quoted market price in an active market, or Level 1 in the fair value hierarchy.

The Company's investment as of September 30, 2023 and December 31, 2022 was $ 1.1 million and $ 0.5 million, respectively.

Any gain or loss on the investment is included on the line "Other, net" in the "Other (income) expense" section of the unaudited condensed consolidated statements of operations as follows:

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 30 SEPTEMBER 30

2023 2022 2023 2022

Gain (loss) on equity investment $ — $ ( 0.3 ) $ 0.5 $ ( 0.9 )

The Company has a debt investment in a third party, OneH2, Inc.

The Company's investment was $ 0.8 million as of each September 30, 2023 and December 31, 2022.

The Company's investment was $ 0.8 million as of each March 31, 2024 and December 31, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements